Amazon Now Charging for Some Returns Made to The UPS Store
Amazon.com has started charging a fee for some returns made at UPS stores. Customers living near a free drop-off location who decide to return their package through UPS may have to pay a $1 fee, an Amazon spokesperson said Tuesday.
"We offer convenient, easy returns to Amazon customers, with one or more options for label-free, box-free returns at no cost," Steve Kelly, an Amazon spokesperson, said in an email to USA Today. "We always offer a free option for customers to return their item — if a customer would prefer to return their item at a UPS Store when there's a free option closer to their delivery address, a very small amount of customers may incur a $1 fee."
Total Retail's Take: Like so many other retailers, Amazon is trying to come up with ways to defray the rising cost that product returns are having on its bottom line. Charging customers for returns isn't a practice exclusive to Amazon — and in reality the e-commerce leader will only be charging a nominal fee for a very small percentage of its returns. Other retailers that have decided to charge customers in some fashion for product returns include Abercrombie & Fitch, American Eagle Outfitters, DSW, J.Crew, Neiman Marcus, REI, Zara, among others.
Retailers are deeming this a necessary step given that the average retailer incurs $165 million in merchandise returns for every $1 billion in sales, according to the National Retail Federation. And with more merchandise being bought online every year, there doesn't seem to be an easy solution to the returns challenge plaguing retailers. Much like they've found ways to pass on shipping costs to customers, I'd expect that retailers will do the same for product returns.
Joe Keenan is the executive editor of Total Retail. Joe has more than 10 years experience covering the retail industry, and enjoys profiling innovative companies and people in the space.